Reeling heavily under an attack of exaggerated success and self-importance, Central Bank of Nigeria Governor, Chukwuma Soludo declared recently that with over 3, 866 branches, a total asset base of N6.5 trillion, a definitive prospect of 7 banks hitting shareholders’ fund in excess of $1 billion, and over 10 of the banks attaining market capitalisation of over $2 billion by the end of the year, Nigeria’s 25 mega banks have achieved world-class status in less than 3 years.
He went further to add that “the CBN is poised to sustain and strengthen the new banking system, as it remains a key driver in the nation’s effort at becoming one of the 20 largest economies in the world by 2020”. This assertion and many others in like manner have become esoteric swansongs on the lips of our modern day Reformers who would never miss any opportunity to regale us with how their advent on our shores has secured our deposits in the banks, multiplied our investments, increased our access to funds and loans, and have further solidified our collective symbol of purchasing power (naira).
Regrettably, the reality on ground in Nigeria does not exactly tally with the above sanctimonious pontifications. The real life experiences that exude from any interface with Nigeria’s post consolidation banks is to say the least, less than laudatory and still way below the mark of acceptable global banking standards. It is appalling, indeed lamentable appalling that 3 years after the consolidation gong was sounded in the Nigerian banking sector and with a preponderance of branches, endless queues and needless suffocation in the banking halls are still common sights in Nigeria’s major banks. A recent experience of a crowd that far exceeded the capacity of the hall of one of Nigeria’s top banks and the attendant risk of losing consciousness in the milieu, confirmed to me in the very clearest terms, the possibility of an early return to the culture of bringing sleeping mats to the banking halls for transactions.
The usual facile mantras readily mouthed by bank officials are “our systems are down”, “there is network failure”, “the ATMs are faulty”, or worst still, “our UPS is down as a result of prolonged power failure”. In an age where technology-enhanced bank halls across the world have become synonymous with serenity and swiftness coupled with highly effective automated teller machines facilitating the creation of a cashless society, Nigeria’s mega banks still wallow in the cesspit of inexplicable network failure which automatically leads to congested bank halls and decrepit and docile ATMs. In most banks where insignias of ATM 24/7 are boldly inscribed, the machines have become defective monuments, swallowing cards without vomiting cash while at the same time deducting the amount requested. One of Nigeria’s big banks has an intimidating register of trapped cards written in 3 voluminous notebooks all in a single branch! A top-flight banker with one of Nigeria’s big banks recently confided in me that Nigerian banks are yet to fully come to terms with the requisite sophistication for efficient ATM services and as a result, he personally avoids the use of ATM while in the country.
As far as Nigerian banks are concerned, world-class status is all about conjuring facts and figures, cooking audited reports, and covering non-performing loans to hoodwink investors and the gullible public all in a visceral bid to shore up their depositors’ and shareholding profiles. These banks are blessed with smart and pushy CEOs who see nothing wrong in active but secret involvement in unethical and sharp practices that run contrary to the key provisions of BOFIA 1991 (Banks and other financial institutions Act). Acts such as concealment (for a fee) of certain deposits that are way beyond the approved limits, money laundering, money transfer scams, injection of bubble capital, and using proxy companies to mop-up shares on the floor of the exchange are seen as smart moves within Nigerian banking circles. The recent indictment and sanction imposed on one of Nigeria’s three leading banks for money laundering offences in United Kingdom and the Spring Bank scandal are all cases in point.
It is now an open secret that for any bank to land choice public sector deposits or sweet forex deals, the bank must romance the ruling party through channeling of depositors’ funds to finance electioneering activities at both presidential and gubernatorial levels. Closely related to this is the prevalence of poor corporate governance, a situation that has birthed the current reign of official sleaze, sharp practices, nepotism, willy-nilly connivance with Banking Supervision Officials of CBN, immoral marketing, victimisation and overzealous contempt for hedge fund operators, family domination, hereditary leadership, and sponsorship of spurious award ceremonies to honour selves as bank of the year, banker of the year or bank CEO of the year.
A colleague of mine, an international broadcast journalist from France, had a ‘world-class’ banking experience that left a sour taste in the mouth last month. An amount as tidy as €20, 000 was sent to her domiciliary account and for her to withdraw the money in naira, Nigeria’s Bankers of the year told her that the money would have to be converted to dollars first and later to naira with the actual amount depreciating in value at every conversion. When she opted to collect her money in its original currency, Euro, she was told plainly to go and come back some other time as the amount requested far exceeded what was available in the bank’s branch at a highbrow area of Ikoyi, and also that Lagos wasn’t safe enough to convey such an amount from another branch in broad daylight. World-class banking à la Nigeria!
Equally laughable is the current foreign exchange regimen, put in place by our world-class banking conscious apex bank, the Central Bank of Nigeria, and faithfully implemented by our mega banks. This regimen achieves no practical, useful purpose other than swelling the clientele of roadside forex hawkers as prospective buyers of forex in Nigeria must present documentations such as international passports and return flight tickets to be eligible to buy either personal or business travel allowance. Methinks that Our modern day Prophets of Bank reforms should know that it makes more sense, globally speaking, to have a list of ineligible transactions that will inadvertently open up people’s minds to possibilities r ather than having a list of eligible transactions as contained in the foreign exchange manual being brandished about with careless flourish.
It is saddening to note that a sizeable part of the banking system in Nigeria has become so rotten that morally upright individuals now express serious reservations about allowing their wards to pick up careers in banking. Recruitment and advancement within the Nigerian banking system are now determined and predicated on one’s capacity to attract and if possible lure to bed, high net-worth clients that can enable the bank to beat the competition and become the bank with the most intimidating depositors’ profile. In the name of post consolidation dynamics, banking halls have become red light offices where Politicians, Senators and Ministers go to, not for financial transactions, but to pick from the bevy of skimpily dressed female bankers and satisfy their daylight concupiscence in exchange for fat deposits. Female Transactions Officers and Branch Heads have been promoted over and above their senior male colleagues as a result of their uncanny ability to fully maximise their ‘natural endowments’ to the benefit of their banks, leaving their male colleagues with no better option than to scamper into towns, posing as Executive Gigolos in search of fat deposits!
It is prudential at this point to state that world-class bank status has nothing to do with rushing to South African PR firms in search of fantastic logos and adverts and paying DSTV for unofficial insertions of same on CNN. It has nothing to do with sponsoring ubiquitous competitions, acquiring state-of-the-art cars, attending every presidential dinner, and conceptualisation of a hodgepodge of obsolete promotions. It sure has more to do with an efficient and effective banking system, built on the solid rock of innovative technology, proactive client service orientation and disposition, people-centred Corporate Social Responsibilities, strict adherence to enabling laws, strong and untainted balance sheet, intimidating war chest of depositors’ and shareholders’ funds built by reaching out to millions of the “unbanked” public, and a strong passion for global excellence as well as good corporate governance. The ABSA bank of South Africa is a shining example of what an African bank with a world-class spirit can achieve after a carefully scripted and thoroughly supervised consolidation exercise where false declaration, cover-up, bribery, and abuse of process were not brought to table.
Central Bank of Nigeria, on its part should wake up from its self-imposed reverie of successful consolidation and commence a drastic overhaul of its Banking Supervision Department, which has been greatly compromised, and polluted by the Nigerian factor. This should be done with a view to strengthening the financial engineering instruments of the apex body as well as flushing out the agents of massive irregularities and sharp professional malpractices that currently abound in their numbers at CBN. The apex body should as a matter of urgency, shift from its current rule-based approach to a risk-based supervision, which will remove the restrictions often placed on accessibility to forex in the country. These and many others should be done accurately and urgent too, that our banking sector may be greater!